EXHIBIT 10.4
EXECUTION VERSION
ADMINISTRATIVE AGENCY AGREEMENT
between
LEASE INVESTMENT FLIGHT TRUST,
as the Issuer
THE ISSUER SUBSIDIARIES IDENTIFIED HEREIN,
BANKERS TRUST COMPANY
in its capacity as the Trustee and the Security Trustee
and
PHOENIX AMERICAN FINANCIAL SERVICES, INC.
as the Administrative Agent
Dated as of June 26, 2001
Table of Contents
Page
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ARTICLE I DEFINITIONS...........................................................................1
Section 1.01 Definitions..........................................................1
ARTICLE II APPOINTMENT; ADMINISTRATIVE SERVICES.................................................4
Section 2.01 Appointment..........................................................4
Section 2.02 Limitations..........................................................5
Section 2.03 Administrative Services..............................................6
Section 2.04 Bank Account Management and Calculation Services....................11
Section 2.05 Accounting Services.................................................14
Section 2.06 Additional Administrative Services..................................16
Section 2.07 Additional Aircraft.................................................17
Section 2.08 New Subsidiaries....................................................17
Section 2.09 The Issuer Group Responsibility.....................................17
ARTICLE III STANDARD OF PERFORMANCE; LIABILITY AND INDEMNITY...................................17
Section 3.01 Standard of Performance.............................................17
Section 3.02 Liability and Indemnity.............................................18
ARTICLE IV ADMINISTRATIVE AGENT UNDERTAKINGS...................................................20
Section 4.01 Administrative Agent Undertakings...................................20
ARTICLE V UNDERTAKINGS OF THE ISSUER GROUP.....................................................22
Section 5.01 Cooperation.........................................................22
Section 5.02 Information.........................................................22
Section 5.03 Scope of Services...................................................22
Section 5.04 Ratification........................................................23
Section 5.05 Covenants...........................................................23
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Section 5.06 Ratification by Subsidiaries........................................24
ARTICLE VI ADMINISTRATION FEES AND EXPENSES....................................................24
Section 6.01 Administration Fees.................................................24
Section 6.02 Expenses............................................................25
Section 6.03 Payment of Expenses.................................................25
ARTICLE VII TERM; REPLACEMENT OF OR RESIGNATION BY THE ADMINISTRATIVE AGENT....................26
Section 7.01 Term................................................................26
Section 7.02 Replacement or Resignation..........................................26
Section 7.03 Consequences of Replacement or Resignation..........................27
Section 7.04 Survival............................................................28
ARTICLE VIII ASSIGNMENT AND DELEGATION.........................................................28
Section 8.01 Assignment and Delegation...........................................28
ARTICLE IX MISCELLANEOUS.......................................................................28
Section 9.01 Notices.............................................................28
Section 9.02 Governing Law.......................................................30
Section 9.03 Jurisdiction........................................................30
Section 9.04 WAIVER OF JURY TRIAL................................................30
Section 9.05 Counterparts; Third Party Beneficiaries.............................30
Section 9.06 Entire Agreement....................................................31
Section 9.07 Table of Contents; Headings.........................................31
Section 9.08 Amendments..........................................................31
Section 9.09 No Partnership......................................................31
Section 9.10 Concerning the Security Trustee and the Trustee.....................31
Section 9.11 Restrictions on Disclosure..........................................32
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SCHEDULES
SCHEDULE 1 - Accounts
SCHEDULE 2 - Issuer Group Services Power of Attorney
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THIS ADMINISTRATIVE AGENCY AGREEMENT (this "Agreement") dated as of June
26, 2001, is made between LEASE INVESTMENT FLIGHT Trust (the "Issuer"), a
Delaware business trust, each ISSUER SUBSIDIARY signatory to this Agreement or
that becomes a party under Section 5.06 hereof (collectively with the Issuer,
the "Issuer Group"), Bankers Trust Company, a New York banking corporation, not
in its individual capacity but solely as the trustee under the Indenture and as
the security trustee under the Security Trust Agreement, and PHOENIX AMERICAN
FINANCIAL SERVICES, INC., a California corporation.
For the consideration set forth herein and other good and valuable
consideration, the receipt of which is hereby acknowledged, the Administrative
Agent, the Trustee, the Security Trustee, the Issuer and the other Issuer Group
Members agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 DEFINITIONS. For purposes of this Agreement, the following
terms have the following meanings. Unless otherwise defined herein, all
capitalized terms used but not defined herein have the meanings assigned to such
terms in the Indenture.
"Administrative Agent" means the Person, at the time of determination,
appointed as the Administrative Agent under this Agreement. The initial
Administrative Agent for both the Issuer Group Services and the Bank Account
Management Services is Phoenix American Financial Services, Inc. If at any time
a different person is appointed as the Administrative Agent for the Issuer Group
Services and as the Administrative Agent for the Bank Account Management
Services, the term "Administrative Agent" shall apply to both or one such Person
as applicable.
"Administrative Fee" has the meaning assigned to such term in Section 6.01
hereof.
"Administrative Services" has the meaning assigned to such terms in
Section 2.01 hereof.
"Affiliate" means a Person that directly, or indirectly through one or
more intermediaries, controls or is controlled by, or is under common control
with, the Person specified; provided, however, that the Issuer, the other Issuer
Group Members, the Trustee, the Security Trustee and the Administrative Agent
shall not be considered to be Affiliates of each other.
"After-Tax Basis" means on a basis such that any payment received, deemed
to have been received or receivable by any Person shall, if necessary, be
supplemented by a further payment to that Person so that the sum of the two
payments shall, after deduction of all U.S. federal, state, local and foreign
Taxes, penalties, fines, interest, additions to Tax and other charges resulting
from the receipt (actual or constructive) or accrual of such payments imposed by
or under any U.S. federal, state, local or foreign law or Governmental Authority
(after taking into account any current deduction to which such Person shall be
entitled with respect to the
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amount that gave rise to the underlying payment) be equal to the payment
received, deemed to have been received or receivable.
"Aircraft Asset Expenses Budget" has the meaning assigned to such term in
Section 7.03(a)(i) of the Servicing Agreement.
"Aircraft Assets" has the meaning assigned to such term in the Servicing
Agreement.
"Annual Appraised Value" means initially the average Base Value of an
Aircraft at the time acquired by an Issuer Group Member and thereafter as
determined annually by the Appraisers.
"Approved Budget" has the meaning assigned to such term in Section 7.03(d)
of the Servicing Agreement.
"Bank Account Management Services" has the meaning assigned to such term
in Section 2.01 hereof.
"Capital Markets Advisor" means Credit Suisse First Boston Corporation.
"Concentration Thresholds" has the meaning assigned to such term in
Section 2.2(a) of Schedule 2.02(a) of the Servicing Agreement.
"Conflicts Standard" has the meaning assigned to such term in Section
3.02(b) of the Servicing Agreement.
"Consolidated Quarterly Draft Accounts" has the meaning assigned to such
term in Section 2.04(b)(ii) hereof.
"Consolidating Quarterly Draft Accounts" has the meaning assigned to such
term in Section 2.04(b)(iii) hereof.
"Dollars" or "$" means the lawful currency of the United States of
America.
"Draft Accounts" has the meaning assigned to such term in
Section 2.05(b)(iii) hereof.
"EU" means the European Union.
"Fee Period" has the meaning assigned to such term in Section 6.01 hereof.
"Governmental Authority" means any court, administrative agency or
commission or other governmental agency or instrumentality (or any Responsible
Officer thereof), domestic, foreign or international, of competent jurisdiction
including, without limitation, the EU.
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"Indenture" means the Trust Indenture dated as of June 26, 2001, between
the Issuer, the Bridge Note Issuer, the Administrative Agent and the Trustee.
"Issuer Group Services" has the meaning assigned to such term in Section
2.01 hereof.
"Lease" means any lease or other agreement or arrangement pursuant to
which any Person (other than an Issuer Group Member) has the right to possession
and use of any Aircraft.
"Lease Operating Budget" has the meaning assigned to such term in Section
7.03(a)(i) of the Servicing Agreement.
"Ledgers" has the meaning assigned to such term in Section 2.04(b)(i)
hereof.
"Maintenance Reserves" has the meaning assigned to such term in the Asset
Purchase Agreement.
"Owner Trustee" means the Wilmington Trust Company, as owner trustee of
the Issuer.
"Quarter" means the fiscal quarter of each Issuer Group Member, as
applicable.
"Ratings" means the ratings assigned to the Securities by the Rating
Agencies.
"Reimbursable Expenses" has the meaning assigned to such term in Section
6.02(b) hereof.
"Schedule 2.02(a)" has the meaning assigned to such term in Section
2.03(k)(viii) hereof.
"Securities Act" means the Securities Act of 1933, as amended.
"Service Providers" means the Persons providing services to the Issuer
Group, including, without limitation, where the context admits, the Servicer,
the Financial Advisor, the Capital Markets Advisor and other Persons performing
similar services or advising the Issuer Group.
"Standard of Care" has the meaning assigned to such term in Section 3.01
of the Servicing Agreement.
"Standard of Performance" has the meaning assigned to such term in Section
3.01 hereof.
"Subsidiary" means, with respect to any Person, a corporation, company or
other entity (i) more than 50% of whose outstanding shares or securities
(representing the right to vote for the election of directors or other managing
authority) are, or (ii) which does not have
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outstanding shares or securities (as may be the case in a partnership, joint
venture or unincorporated association), but more than 50% of whose ownership
interest representing the right to make decisions for such other entity is, now
or hereafter owned or controlled, directly or indirectly, by such Person, but
such corporation, company or other entity shall be deemed to be a Subsidiary
only so long as such ownership or control exists.
"U.S. Bankruptcy Code" has the meaning assigned to such term in Section
7.02(b)(iii) hereof.
"Year" has the meaning assigned to such term in the Servicing Agreement.
ARTICLE II
APPOINTMENT; ADMINISTRATIVE SERVICES
Section 2.01 APPOINTMENT. Each Issuer Group Member hereby appoints the
Administrative Agent as the provider of the administrative and related services
set forth in Section 2.03 hereof, the accounting services set forth in Section
2.05 hereof and the additional administrative services set forth in Sections
2.06, 2.07 and 2.08 hereof (collectively, the "Issuer Group Services") to each
Issuer Group Member on the terms and subject to the conditions set forth in this
Agreement. Each Issuer Group Member acknowledges that it has assigned its
rights, among other things, to administer the Non-Trustee Accounts and it rights
and draw upon any Credit Facility to the Security Trustee pursuant to the
Security Trust Agreement and that pursuant to this Agreement the Security
Trustee has appointed the Administrative Agent its agent to administer the
Non-Trustee Accounts and to administer and draw upon any Credit Facility. In the
event the Trustee or the Security Trustee receives any notice or instruction
from the Administrative Agent with regard to any Issuer Group Services, the
Trustee or the Security Trustee, as applicable, may regard such notice or
instruction as given by the Issuer or any other Issuer Group Member unless
previously notified otherwise in writing by the Issuer.
(b) The Trustee and the Security Trustee hereby appoint the Administrative
Agent as their agent for the purposes of providing the bank account management,
calculation and other services set forth in Section 2.04 hereof and in the
Indenture and performing the other activities (excluding those under Section
2.03(j) hereof and the provisions of the Indenture referenced in Section
2.03(k)(ii) hereof, the performance of which constitute Issuer Group Services)
to be performed by the Administrative Agent under the Indenture (collectively,
the "Bank Account Management Services" and, together with the Issuer Group
Services, the "Administrative Services") and delegate to the Administrative
Agent (except as otherwise specified in the Indenture or the Security Trust
Agreement) their respective authority to administer the Accounts and to
otherwise perform the Bank Account Management Services on the terms and subject
to the conditions set forth in this Agreement. Each of the Trustee and the
Security Trustee hereby directs the Administrative Agent, in its capacity as
such, to enter into and to perform the Administrative Agent's obligations under
the Indenture.
(c) The Administrative Agent hereby accepts such appointments and agrees
to perform the Issuer Group Services on behalf of the Issuer Group Members and
the Bank Account Management Services on behalf of the Trustee and the Security
Trustee, in each case on the
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terms and subject to the conditions set forth in this Agreement. Each party
agrees that the Administrative Agent, in performing the Bank Account Management
Services, is acting exclusively as the agent of the Trustee and the Security
Trustee and not in any agency or other capacity on behalf of any Issuer Group
Member and that no Issuer Group Member has any right to direct the
Administrative Agent with respect to all or any aspect of the Bank Account
Management Services.
(d) The Issuer Group Services do not include any service or matter that is
the responsibility of the Servicer under the Servicing Agreement, the Financial
Advisor under the Financial Advisory Agreement, the Capital Markets Advisor
under the Capital Markets Advisory Letter, the Reference Agent under the
Reference Agency Agreement or the company secretaries of any Issuer Group
Member.
(e) The Issuer Group Services do not include any service or matter that
falls under the categories of "investment business services" or "investment
advice" under the Investment Intermediaries Act, 1995 or any other applicable
provision of Irish law that would require such services to be performed by an
entity that has obtained prior authorization from the Central Bank of Ireland.
Section 2.02 LIMITATIONS. (a) The Administrative Agent agrees (with
respect to the Issuer Group Services) to comply with the terms of the articles
of incorporation, by-laws, trust agreements or similar constituting documents of
each Issuer Group Member and all agreements to which any Issuer Group Member is
a party (including all Related Documents), provided that copies of such
documents and agreements have been delivered to the Administrative Agent and,
without prejudice to the foregoing, not to enter into, on behalf of any Issuer
Group Member, any commitments, loans or obligations or charge, mortgage, pledge,
encumber or otherwise restrict or dispose of the property or assets or expend
any funds of any Issuer Group Member save (i) as expressly permitted by the
terms of this Agreement or (ii) upon a Controlling Trustees' Resolution. The
Administrative Agent (in performing the Bank Account Management Services) agrees
to comply with the terms of the Indenture, the Security Trust Agreement and the
terms of each relevant Credit Facility).
(b) In connection with the performance of (i) the Issuer Group Services,
the Administrative Agent shall (A) have no responsibility for the failure of any
other Person (other than any Person acting as a delegate of the Administrative
Agent under this Agreement pursuant to Section 8.01 hereof) providing services
directly to the Issuer Group to perform its obligations to the Issuer Group and
(B) in all cases be entitled to rely upon the instructions of the Issuer Group
with respect to any Issuer Group Services and upon notices, reports or other
communications made by any Person providing services to the Issuer Group (other
than any Affiliate of the Administrative Agent) and shall not be responsible for
the accuracy or completeness of any such notices, reports or other
communications except to the extent that the Administrative Agent has actual
notice of any matter to the contrary, (ii) the Bank Account Management Services,
the Administrative Agent shall not be responsible for acting upon the
instructions of the Trustee or the Security Trustee (as applicable) and (iii)
the Administrative Services, the Administrative Agent shall not be obligated to
act in any manner that is reasonably likely to (A) violate any Applicable Law,
(B) lead to an investigation by any Governmental
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Authority or (C) expose the Administrative Agent to any liabilities for which,
in the Administrative Agent's good faith opinion, adequate bond or indemnity has
not been provided.
(c) Subject to the limitations set forth in Section 2.02(a), in connection
with the performance of the Issuer Group Services, the Administrative Agent is
expressly authorized by the Issuer and each other Issuer Group Member, (i) to
engage in and conclude commercial negotiations with the Persons providing
services to the Issuer Group, including, without limitation, where the context
admits, the Servicer, the Capital Markets Advisor, the Financial Advisor, the
Reference Agent and other Persons performing similar services or advising the
Issuer Group (the "Service Providers") and with their Responsible Officers, and
(ii) after such consultation, if any, as the Administrative Agent deems
necessary under the circumstances, to act on such Issuer Group Member's behalf
with regard to any and all matters requiring any action on the part of the
Administrative Agent under the Servicing Agreement. The Issuer agrees that it
will give the Administrative Agent and the Servicer 60 days prior Written Notice
of any limitation or modification of the authority set forth in this Section
2.02(c).
(d) The Administrative Agent may rely on the advice of any law firm,
accounting firm, risk management adviser, tax adviser, insurance adviser,
technical adviser, aircraft appraiser or other professional adviser appointed by
the Issuer and any Person appointed in good faith by the Administrative Agent
and shall not be liable for any claim by any Issuer Group Member to the extent
that it was acting in good faith upon the advice of any such persons.
(e) Notwithstanding the appointment of, and the delegation of authority
and responsibility to, the Administrative Agent with respect to the Issuer Group
Services, the Issuer and each other Issuer Group Member shall continue to have
and exercise through its respective controlling trustees or board real and
effective central control and management of all matters related to its ongoing
business, operations, assets and liabilities, subject to matters that are
expressly the responsibility of the Administrative Agent in accordance with the
terms of this Agreement, and each Issuer Group Member shall at all times conduct
its separate ongoing business in such a manner as the same shall at all times be
readily identifiable from the separate business of the Administrative Agent, and
none of the Issuer Group Members is merely lending its name to decisions taken
by others.
Section 2.03 ADMINISTRATIVE SERVICES. The Administrative Agent hereby
agrees to perform and provide the following services for each Issuer Group
Member and its respective governing bodies:
(a) administrative services:
(i) except in such instances in which such preparation and
distribution is required to be done by another party by Applicable Law,
preparation and distribution, at such time as shall be agreed with the
Administrative Agent, of draft trustees or board meeting agendas and any other
papers required in connection with such meetings;
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(ii) maintaining, or monitoring the maintenance of, the books,
records, registers and associated filings of each Issuer Group Member, other
than those required to be maintained by the Owner Trustee;
(iii) providing any administrative assistance reasonably
necessary to assist any Issuer Group Member in carrying out its obligations,
including providing timely notice of decisions to be made, or actions to be
taken, under any of the Related Documents; provided, that if the obligations of
any Issuer Group Member under any of the Related Documents are only required
upon receipt of notice to such Issuer Group Member or the Administrative Agent,
then the Administrative Agent shall provide such administrative assistance only
to the extent it has received such notice or is otherwise aware of such
obligations;
(iv) assisting the Issuer in arranging for directors and officers
liability insurance for and on behalf of the Issuer and each other Issuer Group
Member;
(v) procuring, at the direction of the Controlling Trustees, and
coordinating the advice of, legal counsel, accounting, tax and other
professional advisers at the expense of the relevant Issuer Group Member, to
assist such Issuer Group Member in carrying out its obligations, supervising, in
accordance with instructions from such Issuer Group Member, such legal counsel,
accounting, tax and other advisers and providing each Certificateholder with
annual tax reports on form K-1 on or prior to the date required by Applicable
Law;
(vi) as frequently as is necessary for each Issuer Group Member to
comply with its obligations under the Related Documents, arranging for the
Appraisals to be made and providing the Appraisals to the relevant Service
Providers; and
(vii) providing assistance to the Servicer with respect to matters
for which such assistance is contemplated by the Servicing Agreement or is
reasonably necessary in order for the Servicer to perform its duties in
accordance with the Servicing Agreement;
(b) to monitor the performance of the Service Providers and to report on
such performance to the Controlling Trustees on a quarterly basis, including:
(i) with respect to the Servicer:
(A) monitoring and reviewing the information and other reports
provided by the Servicer pursuant to the Servicing Agreement, including with
respect to the status of Lease payments, Lessee receivables, Maintenance
Reserves, security deposits, adjustments of rentals and claims against
Maintenance Reserves in accordance with Lease terms (to the extent provided to
the Administrative Agent);
(B) assisting the Issuer in evaluating the Servicer's performance
relative to the Standard of Care and the Conflicts Standard; and
(C) monitoring the compliance of the Servicer with its obligations
under the Servicing Agreement;
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(ii) with respect to the other Service Providers, assisting in
evaluating the performance and compliance of each Service Provider against its
obligations under the relevant agreement;
(c) to the extent that (i) the following services are not provided by the
other Service Providers, and (ii) the relevant information is provided to the
Administrative Agent by the Issuer Group or the Service Providers, to act as
liaison with the Rating Agencies with respect to the rating impact of any
decisions on behalf of the Issuer Group, including, without limitation:
(i) informing the Rating Agencies from time to time of any material
changes in the Portfolio, coordinating with the Issuer Group and the Service
Providers and providing the Rating Agencies with such statistical and other
information as they may from time to time request (such information to be
provided at the Issuer Group's expense to the extent that providing such
information requires services that are materially greater in scope than those
being provided pursuant to the express terms of this Agreement);
(ii) providing the Rating Agencies with the Outstanding Principal
Balances of each class or subclass of Notes and loan-to-value ratios (i.e.,
ratio of debt to Annual Appraised Value of the Issuer Group's assets) or any
other financial information the Rating Agencies shall request; and
(iii) coordinating among the Issuer Group, the Servicer and the
Appraisers to ensure that the Appraisals are received as required;
(d) to provide assistance to the Issuer Group in procuring Lessee
consents, novations and other documentation and in taking all other actions
necessary in connection with the reissue or amendment of letters of credit;
(e) to provide assistance to the Issuer Group in the execution of (1) the
acquisition of Pledged Stock and/or Aircraft under the Asset Purchase Agreement,
(2) the re-lease and/or sale of the Aircraft, (3) the acquisition of Additional
Aircraft and (4) financing transactions relating to the Issuer Group after the
Initial Closing Date, including:
(i) coordinating with the Service Providers, legal and other
professional advisers to monitor the protection of the Issuer Group's interests
and rights and coordinating the execution of documentation required at closings;
(ii) providing qualified personnel to attend and provide
administrative support (including the preparation of any certificates required
pursuant to the Servicing Agreement and the Indenture) at the closings in
connection with the acquisition of Pledged Stock and/or Aircraft under the Asset
Purchase Agreement, sales or re-leases of the Aircraft and the acquisition of
any Additional Aircraft, if required (it being understood that the
Administrative Agent will not be obligated to provide legal counsel or legal or
technical services to the Issuer Group);
(iii) coordinating with the Issuer Group and the Service Providers
and assisting in the management of the closing process so that closings will
occur on a timely basis;
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(iv) providing all necessary administrative support to complete any
documentation and other related matters; and
(v) appointing counsel and other appropriate professional advisers
to represent the Issuer Group in connection with any such closings;
(f) to coordinate with the Capital Markets Advisor, including reviewing
the effect on the cash flows required for payment of the Notes of investments
and reinvestments of cash pursuant to this Agreement;
(g) based on information produced or provided to it, to prepare, file
and/or distribute, with the assistance of outside counsel and auditors, if
appropriate, all reports to be prepared, filed and/or distributed by any Issuer
Group Member or its governing bodies, subject to the approval of the Controlling
Trustees in the case of any exchange offer documents filed by the Issuer under
the Securities Act and the Exchange Act, and any reports filed by the Issuer on
Form 10-K and 10-Q and, if such form is being filed with any information other
than the Monthly Report to Holders, any Form 8-K under the Exchange Act,
including:
(i) filings (including, without limitation, Uniform Commercial Code
filings) any Issuer Group Member is required to make in various jurisdictions
and preparing such filings or monitoring counsel and advisers in connection with
the preparation and filing of such materials;
(ii) filings the Issuer is required to make under the Securities Act
and the Exchange Act in connection with the preparation and filing of any
exchange offer documents;
(iii) compliance by the Issuer with applicable periodic reporting
requirements of the Exchange Act, in particular, working with necessary
professional advisers to the Issuer and the Service Providers, as appropriate,
to prepare on behalf of the Issuer and to arrange for the filing and
distribution of an annual report on Form 10-K in respect of the Issuer and, as
periodic reporting requirements of the Exchange Act, quarterly reports on Form
10-Q and any required reports on Form 8-K in respect of the Issuer;
(iv) reports required or recommended to be distributed to investors
(including press releases), and managing investor relations on behalf of the
Issuer Group, and preparing or arranging for the preparation and distribution of
such reports at the Issuer Group's expense; and
(v) reports required to be filed with any Governmental Authorities,
and preparing on behalf of any Issuer Group Member or arranging for the
preparation of and arranging for the filing of any reports required to be filed
with any other entity in order for such Issuer Group Member not to be in
violation of Applicable Law or any applicable covenants;
(h) with respect to amendments:
(i) to report on the substance of any proposed amendments to any
Related Documents; and
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(ii) to the extent requested by the Issuer Group or by the parties
to Related Documents and subject to approval by the appropriate controlling
trustees or board, to coordinate with the Issuer Group's legal counsel, the
other parties thereto and their counsel the preparation and execution of any
amendments to the Related Documents (other than amendments relating to the
Aircraft or the Leases), and to provide assistance in the implementation of such
amendments;
(i) to the extent reasonably requested by the Servicer, to coordinate and
provide assistance on behalf of the Issuer Group with the Servicer in the
performance of the Servicer's obligations under the Servicing Agreement;
(j) to authorize payment of certain bills and expenses (i) payable to
legal and professional advisers authorized to be engaged or consulted pursuant
to this Agreement, (ii) to the extent required by the terms of the Servicing
Agreement or the Indenture or (iii) approved by the Controlling Trustees and to
determine the Required Expense Amount and the amount of Permitted Accruals
determined in accordance with the Indenture;
(k) providing assistance to the Issuer with respect to matters for which
action by the Issuer is required under the Servicing Agreement or the Indenture,
including such assistance that may be necessary for the Issuer to:
(i) comply with Sections 6.08, 7.03(a)(i) and 7.04 of the Servicing
Agreement;
(ii) comply with Sections 5.02, 5.03, 6.12 and 6.13 of the
Indenture;
(iii) provide such instructions to the Servicer as the Servicer may
require in interpreting the Indenture, the Concentration Thresholds and Annex 2
to the Servicing Agreement;
(iv) direct the Servicer to amend the minimum hull and liability
insurance coverage amounts set forth in Annex 1 to the Servicing Agreement;
(v) direct the Servicer as to whether settlement offers received by
the Servicer with respect to claims for damage or loss in excess of $10,000,000
with respect to an Aircraft Asset are acceptable;
(vi) review and request such periodic and other reports as the
Servicer is obligated to provide under the Servicing Agreement;
(vii) provide the Servicer with such information as the Servicer
may reasonably request in connection with the Concentration Thresholds and
certify to the Servicer whenever the proposed Aircraft-related transactions will
result in the violation of such Concentration Thresholds;
(viii) advise the Servicer as required by Section 3(c) of Schedule
2.02(a) of the Servicing Agreement ("Schedule 2.02(a)"); and
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(ix) request market research industry information from the Servicer
in regard to valuations of Aircraft Assets in accordance with Section 6.1 of
Schedule 2.02(a);
(l) to inform the Controlling Trustees as soon as is reasonably
practicable if the Administrative Agent believes that (i) net revenues generated
by the Leases will be insufficient to satisfy the payment obligations of the
Issuer Group and (ii) an Event of Default will result from such insufficiency,
and to advise the Controlling Trustees as to any appropriate action to be taken
(subject to the provisions of the Related Documents) with respect to such
insufficiency and to cause the actions directed by the Controlling Trustees to
be implemented so as to avoid an Event of Default, if it is possible to do so;
(m) to advise the Controlling Trustees as to the appropriate levels of
Reserved Cash;
(n) to oversee the general operation of any credit or liquidity
enhancement facility provided for the benefit of the Issuer, including without
limitation each Credit Facility (including without limitation monitoring the
amounts committed and available for drawing, and outstanding and required to be
repaid, under each such facility);
(o) to determine whether it is necessary or appropriate at any time that
the Issuer make a drawing under any back-up letter of credit of which the Issuer
is the beneficiary and, if so, to administer such drawing on the Issuer's
behalf;
(p) to provide such assistance and financial information to the Capital
Markets Advisor as the Capital Markets Advisor may so reasonably request to
enable the Capital Markets Advisor to perform its obligations under its Capital
Markets Advisory Letter with the Issuer and, consistent with the interest rate
hedging policy adopted by the Issuer on the Initial Closing Date (as the same
may be amended or otherwise modified from time to time;
(q) to assure compliance by each Issuer Group Member with its obligations
under Section 2.07 of the Security Trust Agreement with respect to the
Non-Trustee Accounts, including notifying and instructing each Obligor (as
defined in the Security Trust Agreement) to make payments directly to a
Non-Trustee Account; and
(r) to provide all necessary assistance and information to legal and other
professional advisers to the Issuer Group in connection with any claim, action,
proceeding or petition brought against any Issuer Group Member.
Section 2.04 BANK ACCOUNT MANAGEMENT AND CALCULATION SERVICES. The
Administrative Agent hereby agrees for the benefit of the Trustee and the
Security Trustee to perform and provide the following bank account management
calculation and other services:
(a) INDENTURE OBLIGATIONS. The Administrative Agent shall, in its
capacity as such hereunder, execute and deliver, and perform the obligations
of the Administrative Agent under the Indenture in accordance with the terms
thereof. In particular and without limiting the foregoing:
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(i) THE ACCOUNTS
(A) ESTABLISHMENT AND OPERATIONS OF ACCOUNTS. The Administrative
Agent shall cause the Operating Bank to establish and maintain (in accordance
with Section 3.01(a) of the Indenture and as provided in the Security Trust
Agreement) (1) on the Initial Closing Date (t) the Collections Account, (u) the
Lessee Funded Accounts consisting of the separate accounts so designated on
Schedule 1 hereto, (v) the Rental Accounts designated on Schedule 1 hereto, (w)
the Expense Account, (x) a Note Account for each subclass of Initial Notes and
(y) the Owner Trustee Account and (2) thereafter, as and when required by the
Indenture or as specified in a Controlling Trustees' Resolution delivered to the
Administrative Agent, the Trustee and the Security Trustee or, in the case of
any Rental Account or any Lessee Funded Account, as requested by the Servicer
under the Servicing Agreement, any Account referred to in Section 3.01(a)(ii) of
the Indenture. Each such Account shall, when established, be operated in
accordance with the applicable provisions of Section 3.01 of the Indenture and
Section 2.06 of the Security Trust Agreement.
(B) REPLACEMENT ACCOUNT. If at any time the Security Trustee
Accounts are no longer to be maintained by the then Operating Bank under the
Security Trust Agreement, the Administrative Agent shall cause the successor
Operating Bank to establish and maintain the Accounts previously maintained by
its predecessor (in each case with the same name and purposes as it had so been
maintained) and those to be established and maintained thereafter. In addition,
if, at any time, any Account ceases to be an Eligible Account, the
Administrative Agent shall, within 10 Business Days after notice thereof, cause
the Operating Bank to establish and maintain as an Eligible Account a new
Account having the same name and purpose in accordance with the requirements of
the Indenture.
(C) RENTAL ACCOUNT. With respect to any Rental Account, the
Administrative Agent shall determine, as provided in Section 3.01(f) of the
Indenture, whether or not such Account is required to be established and
maintained as a Non-Trustee Account.
(D) LESSEE PAYMENT INSTRUCTIONS. The Administrative Agent shall take
all necessary steps to ensure that all funds on deposit in each Rental Account
(including any Non-Trustee Account) are, to the extent required by the
Indenture, transferred from such Rental Account to the Collections Account
within one Business Day of receipt thereof (other than certain limited amounts,
if any, required to be left on deposit for local, legal or regulatory reasons).
(E) BANK ACCOUNT STATEMENTS. The Administrative Agent shall take all
necessary steps to ensure that the Operating Bank and each other bank at which a
Non-Trustee Account is located shall furnish as of the close of business on each
Calculation Date a statement providing the then current balance of each
applicable Account to it as well as the Security Trustee, the Issuer, the
Trustee, and the Servicer.
(F) MAINTAINING THE NON-TRUSTEE ACCOUNTS. The Administrative Agent
shall exercise all rights of the Issuer Group Members to instruct or otherwise
communicate with
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the Eligible Institutions at which the Non-Trustee Accounts are maintained and
otherwise to administer the Non-Trustee Accounts.
(ii) CALCULATIONS. Pursuant to Section 3.06 of the Indenture, the
Administrative Agent shall, at the times and in the manner set forth therein,
determine or calculate each of the amounts and provide the reports required to
be determined, calculated or prepared by it pursuant to Sections 3.06(a) through
(e) of the Indenture.
(iii) WITHDRAWALS AND TRANSFERS. The Administrative Agent shall
direct the Operating Bank to make the following withdrawals and transfers in
accordance with the terms of the Indenture:
(A) CLOSING DATE DEPOSITS, WITHDRAWALS AND TRANSFERS. On each
Closing Date, the Administrative Agent shall direct each of the transfers
described in Section 3.03 of the Indenture in accordance with such Section.
(B) INTERIM DEPOSITS AND WITHDRAWALS. From time to time, the
Administrative Agent shall direct the Operating Bank to make the withdrawals and
transfers, and the Administrative Agent shall give the notices, provided for in
Section 3.04 of the Indenture in accordance with such Section.
(C) INTERIM DEPOSITS AND WITHDRAWALS FOR MODIFICATION PAYMENTS OR
DISPOSITIONS OF AIRCRAFT. From time to time, the Administrative Agent shall
direct the Operating Bank to make the withdrawals and transfers provided for in
Section 3.05 of the Indenture in accordance with such Section.
(D) PAYMENT DATE FIRST STEP WITHDRAWALS AND TRANSFERS. On each
Payment Date, the Administrative Agent shall direct the Operating Bank to make
the withdrawals and transfers provided for in Section 3.07 of the Indenture in
accordance with such Section.
(E) PAYMENT DATE SECOND STEP WITHDRAWALS. On each Payment Date,
after the withdrawals and transfers provided for in Section 3.07 of the
Indenture have been made at the direction of the Administrative Agent (except as
permitted in clause (F) below) the Administrative Agent shall direct the
Operating Bank to distribute funds on deposit in the Collections Account as
provided in Section 3.08(a) of the Indenture and shall make such certifications
to the Trustee as may be required hereunder in connection therewith.
(F) EVENT OF DEFAULT AND DEFAULT NOTICE WITHDRAWALS AND TRANSFERS.
Notwithstanding anything to the contrary contained in Section 3.07 or 3.08(a) of
the Indenture, following the delivery of a Default Notice to the Administrative
Agent or the Issuer pursuant to the Indenture or during the continuance of an
Acceleration Default, after the withdrawals and transfers provided for in
Section 3.07 of the Indenture have been made, the Administrative Agent shall
direct the Operating Bank to distribute funds on deposit in the Collections
Account and the Expense Account in the amounts and in the order of priority
provided for in Section 3.08(b) of the Indenture.
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(G) DEFEASANCE/REDEMPTION AND REFINANCING TRANSFERS. The
Administrative Agent shall direct the Operating Bank to transfer from time to
time amounts on deposit in the Defeasance/Redemption Account or, in the case of
a Refinancing, the Refinancing Account to the applicable Note Account in
connection with either the redemption of any class or subclass of Notes in
accordance with Section 3.10 of the Indenture or the exercise of the defeasance
provisions set forth in Article XI of the Indenture and shall give the notices
provided for in Section 3.10 of the Indenture.
(H) CURRENCY CONVERSIONS. If and to the extent that the Issuer
incurs any payment obligation or other cost in a currency other than U.S.
dollars, the Administrative Agent shall, to the extent practicable, convert U.S.
dollars into such other currency at the then prevailing market rate as necessary
to discharge such payment obligations or costs, at the expense of the Issuer in
accordance with Section 12.07 of the Indenture.
(I) INVESTMENTS OF CASH. The Administrative Agent shall at the
direction of the Controlling Trustees (or, following the giving of a Default
Notice or during the continuance of an Acceleration Default at the direction of
the Security Trustee) invest and reinvest the funds on deposit in the Accounts
as permitted by and in accordance with Section 3.02 of the Indenture.
(b) REPORTS. The Administrative Agent shall timely prepare the reports
required by Section 2.15 of the Indenture and provide such reports to the
Trustee and the other Persons indicated in that section.
(c) RECORDS. The Administrative Agent shall provide such information
relating to the Accounts to the Security Trustee, the Trustee, the Capital
Markets Advisor or the Rating Agencies as any of them may reasonably request
from time to time and as required under the Indenture.
Section 2.05 ACCOUNTING SERVICES. The Administrative Agent hereby agrees
to perform and provide the following accounting services:
(a) BUDGETING PROCESS. The Administrative Agent shall, in accordance with
the procedures, policies and guidelines described below and on the basis of
information generated by the Administrative Agent and information provided by
the Service Providers and the Issuer Group:
(i) in respect of each Year during the term of the Servicing
Agreement (other than with respect to the fiscal year commencing on the Initial
Closing Date), and on behalf of the Issuer Group, prepare and deliver to the
Servicer, no later than the September 30 immediately preceding the commencement
of such Year a proposed Lease Operating Budget and a proposed Aircraft Asset
Expenses Budget for such Year together with reasonably detailed supporting
information and the assumptions underlying such proposed Lease Operating Budget
and Aircraft Asset Expenses Budget, such proposed Lease Operating Budget and
Aircraft Asset Expenses Budget to be based, in part, on the information provided
by the Servicer pursuant to Section 7.03(c) of the Servicing Agreement;
15
(ii) on behalf of the Issuer Group, review, discuss and negotiate
with the Servicer such proposed Lease Operating Budgets and Aircraft Asset
Expenses Budgets, and make such adjustments proposed by the Servicer as the
Administrative Agent, in consultation with the Controlling Trustees and with due
regard for current market conditions, may deem appropriate; and
(iii) submit to the Servicer no later than the November 10
immediately preceding the commencement of such Year the Approved Budgets
together with reasonably detailed information regarding the Issuer's underlying
assumptions.
(b) MANAGEMENT ACCOUNTS AND FINANCIAL STATEMENTS. The Administrative Agent
shall, in accordance with the procedures, policies and guidelines described
below and on the basis of information generated by the Administrative Agent and
information provided by the Service Providers and the Issuer Group:
(i) establish an accounting system and maintain the accounting
ledgers of and for each Issuer Group Member in accordance with U.S. GAAP unless
otherwise required by Applicable Law and specified by the Controlling Trustees
(collectively, the "Ledgers");
(ii) prepare and deliver (within 40 days after the end of the
relevant Quarter or, if the end of such Quarter coincides with the end of a
Year, within 75 days after the end of such Year), with respect to the Issuer
Group, on a consolidated basis, a draft balance sheet and draft statement of
changes in shareholders' equity or residual trust interest as of the end of each
Quarter and Year, as applicable, and draft statements of income and cash flows
for each Quarter and Year, as applicable (the "Consolidated Quarterly Draft
Accounts");
(iii) to the extent required by Applicable Law, prepare and deliver
(within 40 days after the end of the relevant Quarter or, if the end of such
Quarter coincides with the end of a Year, within 90 days after the end of such
Year), with respect to the Issuer Group on a combined basis and such of the
Issuer and the other Issuer Group Members as specified by the Controlling
Trustees in a written schedule provided to the Administrative Agent (which
schedule may be updated by the Controlling Trustees to the Administrative Agent
delivered at least 30 days prior to the commencement of the relevant Quarter),
on a consolidating company-by-company basis, a draft balance sheet and statement
of changes in shareholders' equity or residual trust interest as of the end of
each Quarter and Year, as applicable, with respect to such Issuer Group Member
and draft statements of income and cash flows for such Quarter and Year, as
applicable (the "Consolidating Quarterly Draft Accounts" and, together with the
Consolidated Quarterly Draft Accounts the "Draft Accounts"). The Controlling
Trustees shall specify the applicable legal requirements mandating the
preparation of such Consolidating Quarterly Draft Accounts in the written
schedule provided to the Administrative Agent pursuant to this section;
(iv) as required by the Controlling Trustees, arrange and manage the
quarterly review of the Draft Accounts by the Issuer Group's auditors;
(v) arrange for, coordinate with and assist the Issuer Group's
auditors in preparing annual audits;
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(vi) prepare or arrange for the preparation of and arrange for the
filing of the Issuer Group's tax returns in conjunction with the Issuer Group's
tax advisers after submission to the Controlling Trustees to the extent required
by the Controlling Trustees or Applicable Law;
(vii) liaise with the Servicer for the purpose of preparing the
monthly and quarterly reports in accordance with Section 9 of Schedule 2.02(a);
and
(viii) compare the expected cash flows of the Issuer Group and the
budgets to actual results.
(c) OTHER REPORTS. The Administrative Agent shall prepare the Draft
Accounts in accordance with U.S. GAAP unless otherwise required by Applicable
Law and specified by the Controlling Trustees. In connection with the
preparation of the Consolidated Quarterly Draft Accounts, the Administrative
Agent will, provide to the Controlling Trustees, at such times as the
Controlling Trustees may require, a review report (as defined by the Statements
on Standards for Accounting and Review Services issued by the American Institute
of Certified Public Accountants) of the Issuer Group's independent public
accountants with respect to the financial statements of such Issuer Group
Members for, or as of the end of, such Quarter, including in such report such
accountants' statement that, based on its review of such financial statements,
it is not aware of any material modifications that should be made to such
financial statements in order for them to be in conformity with U.S. GAAP or
other applicable accounting principles; provided, however, that, with respect to
such financial statements for, or as of the end of, any Quarter (other than the
last Quarter of any Year), in the event that the Issuer Group does not include
(or cause to be included) any material disclosure required by U.S. GAAP or other
applicable accounting principles to be included within footnotes to such
financial statements, such review report may be qualified solely by stating that
the only modification that should be made to such financial statements in order
for them to be in conformity with U.S. GAAP or other applicable accounting
principles is the inclusion of such disclosure; provided further, however, that
such qualification may not relate to any footnote to such financial statements.
(d) INSTRUCTIONS. The Administrative Agent shall be entitled to request
instructions from the Controlling Trustees as to general guidelines or
principles to be followed in preparing Draft Accounts and as to amending or
supplementing any such guidelines or principles.
Section 2.06 ADDITIONAL ADMINISTRATIVE SERVICES. The Administrative Agent
will provide additional Administrative Services, including (a) providing
assistance to the Capital Markets Advisor in (i) arranging one or more
Refinancings of all or a portion of the Notes, and (ii) arranging for the
payment of any purchase price adjustment necessary to be paid pursuant to the
Asset Purchase Agreement and (b) undertaking efforts to avoid any adverse change
in the tax status of any Issuer Group Member. In addition, upon a request by any
Issuer Group Member, the Administrative Agent will take such other actions as
may be appropriate to facilitate such Issuer Group Member's business operations
and assist the Controlling Trustees in carrying out their obligations; provided,
however, that the Administrative Agent will not be obligated or permitted to
take any action that might reasonably be expected to result in the business of
such
17
Issuer Group Member ceasing to be separate and readily identifiable from, and
independent of, the Administrative Agent, and any of its Affiliates.
Section 2.07 ADDITIONAL AIRCRAFT. In the event that the Issuer Group shall
acquire any Additional Aircraft, the Administrative Agent hereby agrees to
provide the same Administrative Services with respect to all such Additional
Aircraft.
Section 2.08 NEW SUBSIDIARIES. The Administrative Agent shall be
responsible for coordinating with outside legal counsel, auditors, tax advisers
and other professional advisers with respect to all corporate and administrative
matters relating to the formation, operation, corporate affairs and related
matters with respect to all Subsidiaries which are or may become members of the
Issuer Group, including identifying such outside advisers, a potential company
secretary and candidates for trustee to the extent necessary, and shall be
permitted to incur expenses in respect of such Subsidiaries without the Issuer
Group's consent up to such aggregate amount as shall be authorized from time to
time. To the extent that the Administrative Agent shall deem it necessary or
desirable in order for the Issuer Group to carry on its business, the
Administrative Agent shall have the authority to assist in the formation of new
Subsidiaries of the Issuer and to appoint any director to any such Subsidiary
without the consent of the Issuer Group; provided, that such directors are the
same directors of the Issuer then in office unless otherwise required by
applicable local law mandating a particular citizenship for directors. The
Administrative Agent and its personnel may act as company secretary for any
Subsidiary.
Section 2.09 THE ISSUER GROUP RESPONSIBILITY. (a) The obligations of the
Administrative Agent hereunder are limited to those matters that are expressly
the responsibility of the Administrative Agent in accordance with the terms of
this Agreement. Notwithstanding the appointment of the Administrative Agent to
perform the Administrative Services, each Issuer Group Member shall remain
responsible for all matters and decisions related to its business, operations,
assets and liabilities.
(b) Without derogating from the authority and responsibility of the
Administrative Agent with respect to the performance of certain of the
Administrative Services as set forth in this Agreement, it is hereby expressly
agreed and acknowledged that the Administrative Agent is not authorized or
empowered to make or enter into any agreement, contract or other legally binding
arrangement, in respect of or relating to the business or affairs of any Issuer
Group Member, or pledge the credit of, incur any indebtedness on behalf of or
expend any funds of any Issuer Group Member other than as expressly permitted in
accordance with the terms of this Agreement, all such authority and power being
reserved to the appropriate Issuer Group Member or the Security Trustee, as the
case may be.
ARTICLE III
STANDARD OF PERFORMANCE; LIABILITY AND INDEMNITY
Section 3.01 STANDARD OF PERFORMANCE. The Administrative Agent will devote
the same amount of time and attention to and will be required to exercise the
same level of skill, care and diligence in the performance of its services as it
would if it were administering such services on its own behalf (the "Standard of
Performance").
Section 3.02 LIABILITY AND INDEMNITY. (a) The Administrative Agent shall
not be liable for any Losses or Taxes to or of, or payable by any Issuer Group
Member at any time from any cause whatsoever or any Losses or Taxes directly or
indirectly arising out of or in connection with or related to the performance by
the Administrative Agent of this Agreement unless such Losses or Taxes are the
result of the Administrative Agent's own gross negligence, willful misconduct,
deceit or fraud or that of any of its directors, officers, agents or employees,
as the case may be.
(b) Notwithstanding anything to the contrary set forth in any other
agreement to which any Issuer Group Member is a party, the Issuer and the other
Issuer Group Members, do hereby assume liability for and do hereby jointly and
severally agree to indemnify, reimburse and hold harmless on an After-Tax Basis
the Administrative Agent, its directors, officers, employees and agents and each
of them from any and all Losses or Taxes that may be imposed on, incurred by or
asserted against any of them arising out of, in connection with or related to
the Administrative Agent's performance under this Agreement (including any
Losses or Taxes incurred by the Administrative Agent as a result of indemnifying
any Person to whom it shall have delegated its obligations hereunder in
accordance with Section 8.01 hereof, but only to the extent the Administrative
Agent would have been indemnified had it performed such obligations), except as
a result of the gross negligence, willful misconduct, deceit or fraud of the
Administrative Agent or any of its directors, officers, employees or agents.
This indemnity shall not apply to:
(i) Taxes imposed on net income by the revenue authorities of the
State of California or the United States of America in respect of any payment by
any Issuer Group Member to the Administrative Agent due to the performance of
the Administrative Services; and
(ii) Taxes imposed on net income of the Administrative Agent by any
Government Authority other than the revenue authorities of the State of
California or the United States of America to the extent such Taxes would not
have been imposed in the absence of any connection of the Administrative Agent
with such jurisdiction imposing such Taxes other than any connection that
results from the performance by the Administrative Agent of its obligations
under this Agreement. This indemnity shall expressly inure to the benefit of any
director, officer, agent or employee of the Administrative Agent now existing or
in the future and to the benefit of any successor of the Administrative Agent
and shall survive the expiration of this Agreement.
(c) The Administrative Agent agrees to indemnify, reimburse and hold
harmless on an After-Tax Basis each Issuer Group Member and its respective
trustees, directors and agents for any Losses whatsoever which they or any of
them may incur or be subject to in consequence of the performance of the
Administrative Services or any breach of the terms of this Agreement by the
Administrative Agent, but only to the extent such Losses arise due to the
willful misconduct, gross negligence, deceit or fraud of the Administrative
Agent or any of its
19
directors, officers or employees, as the case may be; provided, however, that
this indemnity shall not apply and the Administrative Agent shall have no
liability in respect of Losses to the extent that they arise from (i) the
willful misconduct, deceit or fraud of any Issuer Group Members or their
respective directors, trustees or agents, (ii) any breach by the Administrative
Agent of its obligations under this Agreement to the extent such breach is a
result of a Service Provider's failure to perform its obligations to the Issuer
Group or a failure by the Issuer Group to comply with its obligations under this
Agreement, (iii) any action that the Issuer Group requires the Administrative
Agent to take pursuant to a direction but only to the extent that the
Administrative Agent takes such action in accordance with such direction and in
accordance with the provisions hereof or (iv) a refusal by the Issuer Group to
take action upon a recommendation made in good faith by the Administrative Agent
in accordance with the terms hereof.
(d) The Administrative Agent agrees to indemnify, reimburse and hold
harmless on an After-Tax Basis each of the Trustee, the Security Trustee and the
Operating Bank and their respective trustees, directors and agents for any
Losses whatsoever which they or any of them may incur or be subject to in
consequence of the performance of the Bank Account Management Services or any
breach of the terms of this Agreement by the Administrative Agent, but only to
the extent such Losses arise due to the willful misconduct, gross negligence,
deceit or fraud of the Administrative Agent or any of its directors, officers or
employees, as the case may be; provided, however, that this indemnity shall not
apply and the Administrative Agent shall have no liability in respect of Losses
to the extent that they arise from (i) the willful misconduct, deceit or fraud
of the Trustee or Security Trustee, or their respective directors, trustees or
agents, (ii) any breach by the Administrative Agent of its obligations under
this Agreement to the extent such breach is solely a result of a Service
Provider's failure to perform its obligations to the Issuer Group or a failure
solely by the Issuer Group to comply with its obligations under this Agreement,
(iii) any action that the Trustee or the Security Trustee requires the
Administrative Agent to take pursuant to a direction but only to the extent that
the Administrative Agent takes such action in accordance with such direction and
in accordance with the provisions hereof or (iv) a refusal by the Trustee or the
Security Trustee to take action upon a recommendation made in good faith and
consistent with the provisions relating to the Trustee or the Security Trustee
under the Related Documents by the Administrative Agent in accordance with the
terms hereof.
(e) The Administrative Agent, the Issuer and the other Issuer Group
Members, the Trustee and the Security Trustee acknowledge and agree that the
terms of this Agreement contemplate that the Administrative Agent shall receive
the Relevant Information in order for the Administrative Agent to make required
credit and debit entries and to make the calculations and supply the information
and reports required herein, and that the Administrative Agent will do the
foregoing to the extent such information is so provided by such relevant parties
and on the basis of such information, without undertaking any independent
verification or recalculation of such information.
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ARTICLE IV
ADMINISTRATIVE AGENT UNDERTAKINGS
Section 4.01 ADMINISTRATIVE AGENT UNDERTAKINGS. The Administrative Agent
hereby covenants with the Issuer Group that it will conduct its business such
that it is a separate and readily identifiable business from, and independent
of, each Issuer Group Member and further covenants as follows:
(a) if the Administrative Agent receives any money whatsoever, which
money belongs to any Issuer Group Member, the Trustee or the Security Trustee or
is to be paid to any Issuer Group Member, the Trustee or the Security Trustee or
into any account pursuant to any Related Document or otherwise, it will hold
such money in trust for such Issuer Group Member, the Trustee or the Security
Trustee, as the case may be, and shall keep such money separate from all other
money belonging to the Administrative Agent and shall as promptly as practicable
thereafter pay the same into the relevant account in accordance with the terms
thereof without exercising any right of setoff it may have;
(b) it will comply with any proper directions, orders and
instructions which any Issuer Group Member (with respect to the Issuer Group
Services) or the Security Trustee or the Trustee (with respect to the Bank
Account Management Services) may from time to time give to it in accordance with
the provisions of this Agreement and the Indenture; provided, that during the
continuance of any Event of Default, the Administrative Agent shall comply only
with the instructions of the Security Trustee as to all Administrative Services;
(c) it will not knowingly fail to comply with any legal requirements
in the performance of the Administrative Services;
(d) it will make all payments required to be made by it at any time
and from time to time pursuant to this Agreement on the required date for
payment thereof and shall turn over any amounts owed to the Security Trustee,
the Issuer, any other Issuer Group Member or the Trustee without set-off or
counterclaim;
(e) it will not take any steps for the purpose of procuring the
appointment of any administrative receiver or the making of an administrative
order or for instituting any bankruptcy, reorganization, arrangement,
insolvency, winding up, liquidation, composition or any like proceedings under
the laws of any jurisdiction in respect of any Issuer Group Member or in respect
of any of their respective liabilities, including, without limitation, as a
result of any claim or interest of the Administrative Agent or any of its
Affiliates;
(f) it will cooperate with each Issuer Group Member and its
respective trustees, directors and agents (with respect to the Issuer Group
Services when no Event of Default has occurred and is continuing) and the
Security Trustee and the Trustee (with respect to the Bank Account Management
Services, or, following the giving of a Default Notice or during the continuance
of an Acceleration, all Administrative Services), including by providing such
21
information as may reasonably be requested, to permit such Persons to monitor
the Administrative Agent's compliance with its obligations under this Agreement;
(g) during the term of this Agreement, it will observe all corporate
formalities necessary to remain a legal entity separate and distinct from, and
independent of, each Issuer Group Member;
(h) during the term of this Agreement, it will maintain its assets
and liabilities separate and distinct from each Issuer Group Member;
(i) during the term of this Agreement, it will maintain records,
books, accounts and minutes separate from those of each Issuer Group Member;
(j) during the term of this Agreement, it will pay its obligations
in the ordinary course of its business as a legal entity separate from each
Issuer Group Member;
(k) during the term of this Agreement, it will keep its funds
separate and distinct from the funds of each Issuer Group Member, and it will
receive, deposit, withdraw and disburse such funds separately from the funds of
each Issuer Group Member;
(l) during the term of this Agreement, it will conduct its business
in its own name, and not in the name of any Issuer Group Member;
(m) during the term of this Agreement, it will not pay or become
liable for any debt of any Issuer Group Member, other than to make payments in
the form of indemnity as required by the express terms of this Agreement;
(n) during the term of this Agreement, it will not hold out that it
is a division of any Issuer Group Member or that any Issuer Group Member is a
division of it;
(o) during the term of this Agreement, it will not induce any third
party to rely on the creditworthiness of any Issuer Group Member in order that
such third party will be induced to contract with it;
(p) during the term of this Agreement, it will not enter into any
agreements between it and any Issuer Group Member that are more favorable to
either party than agreements that the parties would have been able to enter into
at such time on an arm's-length basis with a non-affiliated third party, other
than any Related Documents in effect on the date hereof (it being understood
that the parties hereto do not intend by this covenant to ratify any
self-dealing transactions); and
(q) during the term of this Agreement, it will (i) forward promptly
to the Servicer a copy of any material communication received from any Person in
relation to any Lease or Aircraft; (ii) grant such access to the Servicer to its
books of account, documents and other records and to its employees as may be
reasonably necessary for the Servicer or the Additional Servicer to perform its
obligations in respect of any Lease or Aircraft under the Servicing Agreement;
provided, however, that the Servicer shall not have access to the minutes of the
22
Administrative Agent's board meetings and other confidential business
information; and (iii) execute and deliver such documents and do such acts and
things as the Servicer may reasonably request in order to effect the purposes of
the Servicing Agreement.
ARTICLE V
UNDERTAKINGS OF THE ISSUER GROUP
Section 5.01 COOPERATION. The Issuer and the other Issuer Group Members
shall use commercially reasonable efforts to cause any Service Provider to at
all times cooperate with the Administrative Agent to enable the Administrative
Agent to provide the Issuer Group Services, including providing the
Administrative Agent with all powers of attorney as may be reasonably necessary
or appropriate for the Administrative Agent to perform the Issuer Group Services
in accordance with this Agreement. In addition, as and to the extent requested
by the Administrative Agent, the Trustee and the Security Trustee, the Issuer
and the other Issuer Group Members shall use commercially reasonable efforts to
cause any Service Provider to at all times cooperate with the Administrative
Agent to enable the Administrative Agent to provide the Bank Account Management
Services. The Trustee and the Security Trustee shall provide the Administrative
Agent with such powers of attorney as may be reasonably necessary or appropriate
for the Administrative Agent to perform the Bank Account Management Services in
accordance with this Agreement.
Section 5.02 INFORMATION. The Issuer will provide the Administrative Agent
with the following information in respect of itself and each other Issuer Group
Member:
(a) copies of all Related Documents, including the articles of
incorporation, by-laws, trust agreements (or equivalent documents) of each
Issuer Group Member, and copies of all books and records maintained on behalf of
each such Issuer Group Member;
(b) details of all bank accounts and bank mandates maintained by any
Issuer Group Member;
(c) names of and contact information with respect to the Controlling
Trustees or board for each Issuer Group Member;
(d) such other information as is necessary to the Administrative
Agent's performance of the Administrative Services; and
(e) a copy of any information provided to the Issuer Group
pursuant to the Servicing Agreement; provided, that such information as is
referred to in this Section 5.02 (with the exception of paragraphs (d) and (e))
shall be provided to the Administrative Agent after the execution of this
Agreement and, in respect of any amendment or changes to the information
provided to the Administrative Agent after the execution of this Agreement,
promptly following the effectiveness of such amendments or changes.
Section 5.03 SCOPE OF SERVICES. (a) In the event that any Issuer Group
Member shall enter into any agreement, amendment or other modification of any
Lease or shall take any other
23
action that has the effect of increasing in any material respect the scope,
nature or level of the Issuer Group Services to be provided under this Agreement
without the Administrative Agent's express prior written consent, the Issuer
Group shall so notify the Administrative Agent and the Administrative Agent
shall not be obligated to perform the affected Administrative Service to the
extent of such increase unless and until the Administrative Agent and the Issuer
Group shall agree on the terms of such increased Administrative Service (it
being understood that (i) the Administrative Agent shall have no liability to
any Issuer Group Member directly or indirectly arising out of, in connection
with or related to the Administrative Agent's failure to perform such increased
Administrative Service prior to any such agreement and (ii) the Issuer Group
shall not be permitted to engage another Person to perform the affected
Administrative Service without the prior written consent of the Administrative
Agent unless the Administrative Agent has indicated it is unable or unwilling to
act in respect of the affected Administrative Service or the Administrative
Agent requires payment of more than reasonable additional compensation for such
additional Administrative Service).
(b) In the event that the Issuer Group shall acquire Additional
Aircraft, the Issuer Group shall so notify the Administrative Agent and the
Administrative Agent shall be obligated to provide the Issuer Group Services
with respect to such Additional Aircraft in accordance with Section 2.07 hereof.
Section 5.04 RATIFICATION. The Issuer and the other Issuer Group Members
hereby ratify and confirm and agree to ratify and confirm (and shall furnish
written evidence thereof upon request of the Administrative Agent) any act or
omission by the Administrative Agent with respect to any Issuer Group Services
in accordance with this Agreement in the exercise of any of the powers or
authorities conferred upon the Administrative Agent under the terms of this
Agreement, it being expressly understood and agreed that none of the foregoing
shall have any obligation to ratify and confirm, and expressly does not ratify
and confirm, any act or omission of the Administrative Agent in violation of
this Agreement, the Standard of Performance or for which the Administrative
Agent is obligated to indemnify any Issuer Group Member under Article III
hereof.
Section 5.05 COVENANTS. Each of the Issuer and the other Issuer Group
Members covenants with the Administrative Agent that it will conduct its
business such that it is a separate and readily identifiable business from, and
independent of, the Administrative Agent and any of its Affiliates and further
covenants as follows:
(a) during the term of this Agreement, it will observe all corporate
formalities necessary to remain legal entities separate and distinct from, and
independent of, the Administrative Agent, and any of its Affiliates;
(b) during the term of this Agreement, it will maintain its assets
and liabilities separate and distinct from those of the Administrative Agent;
(c) during the term of this Agreement, it will maintain records,
books, accounts, and minutes separate from those of the Administrative Agent;
24
(d) during the term of this Agreement, it will pay its obligations
in the ordinary course of business as a legal entity separate from the
Administrative Agent;
(e) during the term of this Agreement, it will keep its funds
separate and distinct from any funds of the Administrative Agent, and will
receive, deposit, withdraw and disburse such funds separately from any funds of
the Administrative Agent;
(f) during the term of this Agreement, it will conduct its business
in its own name, and not in the name of the Administrative Agent;
(g) during the term of this Agreement, it will not agree to pay or
become liable for any debt of the Administrative Agent, other than to make
payments in the form of indemnity as required by the express terms of this
Agreement;
(h) during the term of this Agreement, it will not hold out that it
is a division of the Administrative Agent, or that the Administrative Agent is a
division of it;
(i) during the term of this Agreement, it will not induce any third
party to rely on the creditworthiness of the Administrative Agent in order that
such third party will be induced to contract with it;
(j) during the term of this Agreement, it will not enter into any
transaction between it and the Administrative Agent that are more favorable to
either party than transactions that the parties would have been able to enter
into at such time on an arm's-length basis with a non-affiliated third party,
other than any agreements in effect on the date hereof (it being understood that
the parties hereto do not intend by this covenant to ratify any self-dealing
transactions); and
(k) during the term of this Agreement, it will observe all material
corporate or other procedures required under Applicable Law and under its
constitutive documents.
Section 5.06 RATIFICATION BY SUBSIDIARIES. The Issuer hereby undertakes to
procure that, if so requested by the Administrative Agent, any subsidiary of the
Issuer formed or acquired after the date hereof, shall execute an agreement with
the Administrative Agent adopting and confirming, as regards such subsidiary,
the terms of this Agreement, and agreeing to ratify anything done by the
Administrative Agent in connection herewith on the terms of Section 5.04.
ARTICLE VI
ADMINISTRATION FEES AND EXPENSES
Section 6.01 ADMINISTRATION FEES. In consideration of the Administrative
Agent's performance of the Administrative Services, the Issuer agrees to pay to
the Administrative Agent a per annum amount equal to $624,000 for the first five
years commencing after the Initial Closing Date and a per annum amount equal to
$660,000 (subject to an annual cost of living adjustments (not to exceed 5% in
any given year) based on the consumer price index for the San Francisco region)
thereafter for the remainder of the term plus $1,000 for each Aircraft in excess
25
of 39 owned by the Issuer Group (the "Administrative Fee") payable in arrears in
equal monthly installments (each monthly payment, an "Administrative Fee") on
each Payment Date (until the resignation or removal of the Administrative Agent)
for each period commencing on and including the Initial Closing Date (or,
thereafter, the last of day of the immediately preceding period) and ending on
but excluding the Calculation Date immediately preceding such Payment Date (each
such period, a "Fee Period").
Section 6.02 EXPENSES. (a) The Administrative Agent shall be responsible
for (i) all telephone, facsimile and communications costs and expenses directly
relating to or associated with the Administrative Agent's performance of its
duties as set forth in this Agreement up to an annual amount of $20,000 and (ii)
all fees and expenses owed to aviation consultants hired to assist the
Administrative Agent with the Administrative Services up to an annual amount of
$25,000.
(b) Subject to the provisions of Section 6.02(a), the Issuer Group
shall be responsible for the following expenses incurred by the Administrative
Agent in the performance of its obligations ("Reimbursable Expenses"):
(i) reasonable out of pocket expenses, including travel,
accommodation and subsistence and approved expenditures in respect of insurance
coverage for the Administrative Agent;
(ii) annual telephone, fax and communication costs and expenses
necessarily and directly incurred in connection with the performance of the
Administrative Services in excess of $20,000 and annual fees and expenses to
aviation consultants hired to assist the Administrative Agent with the
Administrative Services in excess of $25,000;
(iii) expenses expressly authorized by (i) the Controlling Trustees
or (ii) any Person to whom such authority has been delegated, other than the
Administrative Agent or its Affiliates; and
(iv) expenses expressly authorized pursuant to other provisions of
this Agreement.
Section 6.03 PAYMENT OF EXPENSES. No later than each Calculation Date, the
Administrative Agent shall deliver a notice to the Issuer Group, setting forth
the amounts of Reimbursable Expenses owed to the Administrative Agent pursuant
to Section 6.02 of this Agreement through and including such Calculation Date
(it being understood that if there are no such expenses the Administrative Agent
will be under no obligation to provide such notice). The Issuer Group agrees to
pay to the Administrative Agent an amount equal to all such Reimbursable
Expenses on the next Payment Date following such Calculation Date.
26
ARTICLE VII
TERM; REPLACEMENT OF OR RESIGNATION BY THE ADMINISTRATIVE AGENT
Section 7.01 TERM. This Agreement shall have a term commencing on the
Initial Closing Date and expiring on the date of payment in full of all amounts
outstanding to be paid on the Securities.
Section 7.02 REPLACEMENT OR RESIGNATION. (a) At any time during the term
of this Agreement (i) the Issuer Group by a Controlling Trustees' Resolution,
shall be entitled to replace the then existing Administrative Agent performing
the Issuer Group Services with a new Administrative Agent appointed by it (with
the prior written consent of the Servicer, such consent not to be unreasonably
withheld or delayed (it being understood that the Servicer may consider, among
other factors, whether the proposed Administrative Agent is a "Competitor" as
defined in the Servicing Agreement)) on 120 days' Written Notice to the
Administrative Agent, the Trustee and the Security Trustee, except following the
delivery of a Default Notice or during the continuance of an Acceleration
Default (in which case all such powers shall be vested in the Security Trustee
as provided in clause (ii) below) and (ii) the Security Trustee shall be
entitled to replace the then existing Administrative Agent performing the Bank
Account Management Services and, following the delivery of a Default Notice or
during the continuance of an Acceleration Default, all of the Administrative
Services with a new Administrative Agent appointed by it on 120 days' written
notice.
(b) At any time during the term of this Agreement, the Administrative
Agent shall be entitled to resign as the Administrative Agent performing the
Issuer Group Services, the Bank Account Management Services or both such
Administrative Services on 120 days' Written Notice to the Issuer, the Security
Trustee and the Trustee if:
(i) any Issuer Group Member shall fail to pay in full when due (A)
any Administrative Fee or any Reimbursable Expenses in an aggregate amount in
excess of $50,000 and such failure continues for a period of 30 days, in either
case, after the effectiveness of Written Notice from the Administrative Agent of
such failure or (B) any other amount payable to the Administrative Agent
hereunder, and such failure continues for a period of 60 days after Written
Notice from the Administrative Agent of such failure;
(ii) any Issuer Group Member shall fail to perform or observe or
shall violate in any material respect any material term, covenant, condition or
agreement to be performed or observed by it in respect of this Agreement and
such failure continues for a period of 30 days after the Issuer Group shall have
received notice of such failure (other than with respect to payment obligations
referred to in clause (b)(i) of this Section 7.02);
(iii) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking relief in
respect of the Issuer or any Issuer Group Member, or of a substantial part of
the property or assets of the Issuer or any other Issuer Group Member, under
Title 11 of the United States Code, as now constituted or hereafter
27
amended (the "U.S. Bankruptcy Code"), or any other U.S. federal or state or
foreign bankruptcy, insolvency, receivership or similar law, and such proceeding
or petition shall continue undismissed for 120 days or an order or decree
approving or ordering any of the foregoing shall be entered or the Issuer or any
other Issuer Group Member shall go into liquidation, suffer a receiver or
mortgagee to take possession of all or substantially all of its assets or have
an examiner appointed over it or if a petition or proceeding is presented for
any of the foregoing and not discharged within 120 days; or
(iv) the Issuer or any other Issuer Group Member shall (A)
voluntarily commence any proceeding or file any petition seeking relief under
the U.S. Bankruptcy Code, or any other U.S. federal or state or foreign
bankruptcy, insolvency, receivership or similar law, (B) consent to the
institution of, or fail to contest the filing of, any petition described in
clause (b)(iii) of this Section 7.02, (C) file an answer admitting the material
allegations of a petition filed against it in any such proceeding or (D) make a
general assignment for the benefit of its creditors.
(c) No replacement of the Administrative Agent pursuant to Section 7.02(a)
and no resignation by the Administrative Agent pursuant to Section 7.02(b) shall
become effective prior to the date on which a successor Administrative Agent
shall have become a party to this Agreement and accepted appointment as such
successor Administrative Agent; provided, however, that in the event that a
successor Administrative Agent shall not have been appointed within 90 days
after such resignation, the Administrative Agent may petition any court of
competent jurisdiction for the appointment of a successor Administrative Agent.
Upon any such replacement or resignation, the Administrative Agent shall be
entitled to the payment of any compensation owed to it hereunder and to the
reimbursement of all Reimbursable Expenses incurred in connection with all
services rendered by it hereunder, as provided in Section 6 hereof, and for so
long as the Administrative Agent is continuing to perform any of the
Administrative Services, the Administrative Agent shall be entitled to continue
to be paid all amounts due to it hereunder, net of any amounts that shall have
been finally adjudicated by a court of competent jurisdiction to be owed by the
Administrative Agent to the Issuer Group or not to be due to the Administrative
Agent, until a successor Administrative Agent shall have been appointed and
shall have accepted such appointment.
Section 7.03 CONSEQUENCES OF REPLACEMENT OR RESIGNATION. (a) NOTICES. (i)
Following the replacement or resignation of the Administrative Agent pursuant to
Section 7.01 or 7.02, the Administrative Agent will promptly forward to the
Issuer Group any notices in respect of the Issuer Group Services and to the
Trustee and the Security Trustee any notices in respect of the Bank Account
Management Services received by it during the year immediately following the
replacement and resignation of the Administrative Agent pursuant to this
Agreement.
(ii) The Issuer Group will notify promptly any relevant third party,
including each Rating Agency, the Security Trustee, the Trustee, and the
Servicer, of the replacement and resignation of the Administrative Agent
pursuant to the Agreement and will request that any such notices and accounting
reports and communications thereafter be made or given directly to the entity
engaged to serve as Administrative Agent, and to the other parties hereto.
28
(b) ACCRUED RIGHTS. The replacement and resignation of the
Administrative Agent pursuant to this Agreement shall not affect the respective
rights and liabilities of any party accrued prior to such termination in respect
of any prior breaches hereof or otherwise.
(c) REPLACEMENT. If the Administrative Agent is replaced or resigns,
the Administrative Agent will cooperate with any person appointed to perform the
relevant Administrative Services, including providing such person with all
information and documents reasonably requested.
Section 7.04 SURVIVAL. Notwithstanding any replacement or resignation of
the Administrative Agent or the expiration of this Agreement, the obligations of
the Issuer Group and the Administrative Agent under Section 3.02 shall survive
such replacement or resignation of the Administrative Agent or expiration, as
the case may be.
ARTICLE VIII
ASSIGNMENT AND DELEGATION
Section 8.01 ASSIGNMENT AND DELEGATION. (a) Except as provided in
subsection (b) below, no party to this Agreement shall assign or delegate or
otherwise subcontract this Agreement or all or any part of its rights or
obligations hereunder to any Person without the prior written consent of the
other parties (such consent not to be unreasonably withheld) and, except with
respect to the Bank Account Management Services, assign or delegate or otherwise
subcontract to a "Competitor" of the Servicer (as defined in the Servicing
Agreement), without the prior written consent of the Servicer; provided that the
Issuer Group Members may assign their rights hereunder to the Security Trustee
for the benefit of the Secured Parties under the terms of the Security Trust
Agreement.
(b) The Administrative Agent may assign its right to receive
compensation for the performance of all or any part of the services set forth in
Article II, including without limitation, the establishment and maintenance of
the Ledgers and the preparation of the Draft Accounts.
(c) Without limiting the foregoing, any Person who shall become a
successor by assignment or otherwise of any party hereto shall be required as a
condition to the effectiveness of any such assignment or other arrangement to
become a party to this Agreement.
29
ARTICLE IX
MISCELLANEOUS
Section 9.01 NOTICES. All notices, consents, directions, approvals,
instructions, requests and other communications required or permitted by this
Agreement to be given to any Person shall be in writing, and any such notice
shall become effective ten (10) days after being deposited in the mails,
certified or registered, return receipt requested, with appropriate postage
prepaid for first class mail, or if delivered by hand or courier service or in
the form of a facsimile, when received (and, in the case of a facsimile, receipt
of such facsimile is confirmed to the sender), and shall be directed to the
address or facsimile number of such Person set forth below:
If to the Issuer and the other Issuer Group Members, to:
Lease Investment Flight Trust
c/o Wilmington Trust Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Corporate Trust Administrator
Fax: (000) 000-0000
with copies to:
Phoenix American Financial Services, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxx Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Financial Services Division
and
Xxxxxx X. Xxxxxxx, Xx.
00 Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Fax: (000)000-0000
and
Xxxxxxxx X. Xxxxxxxxx
0000 Xxxxxxxxx Xx.
Xxxxxxx, XX 00000
Fax: (000)000-0000
and
Xxxxx X. Xxxxxxx
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Fax: (000)000-0000
30
if to the Administrative Agent, to:
Phoenix American Financial Services, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxx Xxxxxx, XX 00000
Fax: (000) 000-0000
Attention: Financial Services Division
if to the Trustee or the Security Trustee, to:
Bankers Trust Company
Four Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust and Agency Services-Structured Finance
Fax: (000) 000-0000
From time to time any party to such agreement may designate a new address
or number for purposes of notice thereunder by notice to each of the other
parties thereto.
Section 9.02 GOVERNING LAW. THIS AGREEMENT SHALL IN ALL RESPECTS BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE.
Section 9.03 JURISDICTION. Except as otherwise expressly provided in this
Agreement, the parties hereto agree that any suit, action or proceeding seeking
to enforce any provision of, or based on any matter arising out of or in
connection with, this Agreement or the transactions contemplated hereby may be
brought in the United States District Court for the Southern District of New
York or any other New York State court sitting in New York City, and each of the
parties hereby consents to the jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in Section 9.01 shall be deemed
effective service of process on such party.
Section 9.04 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
Section 9.05 COUNTERPARTS; THIRD PARTY BENEFICIARIES. This Agreement may
be signed in any number of counterparts, each of which shall be an original,
with the same effect as if the
31
signatures thereto and hereto were upon the same instrument. This Agreement
shall become effective when each party hereto shall have received a counterpart
hereof signed by the other party hereto. No provision of this Agreement is
intended to confer upon any Person other than the parties hereto any rights or
remedies hereunder.
Section 9.06 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the subject matter of this
Agreement.
Section 9.07 TABLE OF CONTENTS; HEADINGS. The table of contents and
headings of the various articles, sections and other subdivisions of such
agreement are for convenience of reference only and shall not modify, define or
limit any of the terms or provisions of such agreement.
Section 9.08 AMENDMENTS. This Agreement may not be amended, supplemented
of otherwise modified except in a writing executed by all parties hereto,
provided that the Administrative Agent, the Security Trustee and the Trustee may
amend, supplement of otherwise modify this Agreement to alter the Bank Account
Management Services without the consent of, or the execution of any writing by,
the Issuer or any other Issuer Group Member. To the extent that so doing would,
directly or indirectly, affect the Servicer's rights, obligations or liabilities
(or potential liabilities) under the Servicing Agreement, this Agreement may not
be amended to alter the scope of Issuer Group Services in any material respect
without the consent of the Servicer (such consent not to be unreasonably
withheld or delayed). Prior to the execution of any such amendment, supplement
or modification, the Security Trustee and the Trustee shall be entitled to
receive an Officer's Certificate to the effect that all conditions precedent to
such amendment, modification or supplement, if any, have been satisfied.
Section 9.09 NO PARTNERSHIP. (a) It is expressly recognized and
acknowledged that this Agreement is not intended to create a partnership, joint
venture or other similar arrangement between any Issuer Group Member or Members
on the one part and the Administrative Agent on the other part. It is also
expressly understood that any actions taken on behalf of any Issuer Group Member
by the Administrative Agent shall be taken as agent for such Issuer Group
Member, either naming the relevant Issuer Group Member, or naming the
Administrative Agent as agent for an undisclosed principal. No Issuer Group
Member shall hold itself out as a partner of the Administrative Agent, and the
Administrative Agent will not hold itself out as a partner of any Issuer Group
Member.
(b) The Administrative Agent shall not have any fiduciary duty or
other implied obligations or duties to any Issuer Group Member, any Lessee or
any other Person arising out of this Agreement.
Section 9.10 CONCERNING THE SECURITY TRUSTEE AND THE TRUSTEE. In respect
of the Security Trustee's and Trustee's performance of appointing the
Administrative Agent to provide the Bank Account Management Services, the
Security Trustee and the Trustee shall be afforded all of the rights,
protections, immunities and indemnities contained in the Security Trust
32
Agreement and the Indenture, respectively, as if such rights, protections,
immunities and indemnities were specifically set forth herein. It is expressly
understood and agreed that neither the Security Trustee nor the Trustee shall
have any liability in respect of the appointment, performance or nonperformance
of the Administrative Agent, all such liability, if any, being expressly waived
by the parties hereto and by any Person claiming by, through or under such
parties.
Section 9.11 RESTRICTIONS ON DISCLOSURE. The Administrative Agent agrees
that it shall not, prior to the termination or expiration of this Agreement or
within the three (3) years after such termination or expiration, disclose to any
Person any information stated in writing by an Issuer Group Member or the
Servicer to be confidential or proprietary, whether of a technical, financial,
commercial or other nature, received directly or indirectly from the Issuer
Group or the Servicer regarding the Issuer Group or the Servicer or their
respective businesses or the Aircraft.
Notwithstanding anything herein to the contrary, the foregoing shall not
be construed to prohibit (i) disclosure of any and all information that is or
becomes publicly known, or information obtained by the Administrative Agent from
sources other than an Issuer Group Member or the Servicer, (ii) disclosure of
any and all information (A) if required to do so by any Applicable Law, (B) to
any government agency or regulatory body having or claiming authority to
regulate or oversee any respects of the Administrative Agent's business or that
of its affiliates, (C) pursuant to any subpoena, civil investigative demand or
similar demand or request of any court, regulatory authority, arbitrator or
arbitration to which the Administrative Agent or an affiliate or an officer,
director, employer or shareholder thereof is a party, (D) in any preliminary or
final offering circular, registration statement or contract or other document
pertaining to the transactions contemplated by this Agreement approved in
advance by any Issuer Group Member or (E) to any affiliate, independent or
internal auditor, agent, employee or attorney of the Administrative Agent having
a need to know the same, provided that the Administrative Agent advises such
recipient of the confidential nature of the information being disclosed, or
(iii) any other disclosure authorized by any Issuer Group Member or the
Servicer.
Section 9.12 POWER OF ATTORNEY. The Issuer shall, and shall cause each
other Issuer Group Member, to appoint the Administrative Agent and its
successors, and its permitted designees and assigns, as their true and lawful
attorney-in-fact pursuant to the form of Power of Attorney attached as Schedule
2 to this Agreement (with such modifications as are necessary under the laws of
the jurisdictions in which such Persons are organized). The Administrative Agent
shall be entitled to seek and obtain from the Issuer (and/or any other Issuer
Group Member as appropriate) a power of attorney in respect of the execution of
any specific action as the Administrative Agent requests which is required in
connection with the Administrative Services.
IN WITNESS WHEREOF, this Agreement has been duly executed on
the date first written above.
LEASE INVESTMENT FLIGHT TRUST,
By Wilmington Trust Company,
not in its individual capacity but
solely as the Owner Trustee
By: /s/ XXXXXXXX X. XXXXXXXX
-----------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Administrative Account Manager
LIFT TRUST - SUB 1,
By Wilmington Trust Company,
not in its individual capacity but
solely as the owner trustee
By: /s/ XXXXXXXX X. XXXXXXXX
-----------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Administrative Account Manager
BANKERS TRUST COMPANY,
as the Operaing Bank and thet
Security Trustee
By: /s/ XXXXXX XXXXXX
-----------------------------------------
Name: Xxxxxx Xxxxxx
Title: Vice President
PHOENIX AMERICAN FINANCIAL SERVICES, INC.
By: /s/ XXXXXX XXXXXX
-----------------------------------------
Name: Xxxxxx Xxxxxx
Title: AVP
LIFT CEA CHINA, LLC
By: LIFT Trust-Sub 1, as member
By: Wilmington Trust Company, not in its
individual capacity but solely as the owner
trustee
By /s/ XXXXXXXX X. XXXXXXXX
------------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Administrative Account Manager
LIFT CANADA, LLC
By: LIFT Trust-Sub 1, as member
By: Wilmington Trust Company, not in its
individual capacity but solely as the owner
trustee
By /s/ XXXXXXXX X. XXXXXXXX
------------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Administrative Account Manager
LIFT GF UK, LLC
By: LIFT Trust-Sub 1, as member
By: Wilmington Trust Company, not in its
individual capacity but solely as the owner
trustee
By /s/ XXXXXXXX X. XXXXXXXX
------------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Administrative Account Manager
LIFT ARIZONA, LLC
By: LIFT Trust-Sub 1, as member
By: Wilmington Trust Company, not in its
individual capacity but solely as the owner
trustee
By /s/ XXXXXXXX X. XXXXXXXX
------------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Administrative Account Manager
LIFT MISSOURI, LLC
By: LIFT Trust-Sub 1, as member
By: Wilmington Trust Company, not in its
individual capacity but solely as the owner
trustee
By /s/ XXXXXXXX X. XXXXXXXX
------------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Administrative Account Manager
LIFT A2K UK, LLC
By: LIFT Trust-Sub 1, as member
By: Wilmington Trust Company, not in its
individual capacity but solely as the owner
trustee
By /s/ XXXXXXXX X. XXXXXXXX
------------------------------------------
Name: Xxxxxxxx X. Xxxxxxxx
Title: Administrative Account Manager
MD82 AIRCRAFT LEASING I CORPORATION
By /s/ XXXXX XXXXXXX
------------------------------------------
Name: Xxxxx Xxxxxxx
Title: President
MD82 AIRCRAFT LEASING II CORPORATION
By /s/ XXXXX XXXXXXX
------------------------------------------
Name: Xxxxx Xxxxxxx
Title: President
MD82 AIRCRAFT LEASING III CORPORATION
By /s/ XXXXX XXXXXXX
------------------------------------------
Name: Xxxxx Xxxxxxx
Title: President
A320 AIRCRAFT LEASING IX CORPORATION
By /s/ XXXXX XXXXXXX
------------------------------------------
Name: Xxxxx Xxxxxxx
Title: President
A320 AIRCRAFT LEASING X CORPORATION
By /s/ XXXXX XXXXXXX
------------------------------------------
Name: Xxxxx Xxxxxxx
Title: President
SCHEDULE 1
ACCOUNTS
ACCOUNT NAME ACCOUNT NUMBER
--------------------------------------------------------------------------------
LIFT LESSEE FUND AIR 2000 29618 32006
------------------------------------
LIFT LESSEE FUND AMERICA WEST 23384 32007
------------------------------------
LIFT LESSEE FUND ASIANA AIRLINES 24469 32008
------------------------------------
LIFT LESSEE FUND CHINA EASTERN 1093 32009
------------------------------------
LIFT LESSEE FUND CHINA EASTERN 1108 32010
------------------------------------
LIFT LESSEE FUND CHINA EASTERN 49511 32011
------------------------------------
LIFT LESSEE FUND CHINA EASTERN 49513 32012
------------------------------------
LIFT LESSEE FUND CHINA EASTERN 49515 32013
------------------------------------
LIFT LESSEE FUND EASYJET 29338 32014
------------------------------------
LIFT LESSEE FUND GARUDA 24512 32015
------------------------------------
LIFT LESSEE FUND KOREAN AIRLINES 48523 32022
------------------------------------
LIFT LESSEE FUND MALAYSIAN AIRLINES 28427 32023
------------------------------------
LIFT LESSEE FUND NOUVELAIR 53147 32024
------------------------------------
LIFT LESSEE FUND PEGASUS 28628 32025
------------------------------------
LIFT LESSEE FUND RIO SUL 28565 32026
------------------------------------
LIFT LESSEE FUND ROYAL AIR MAROC 28592 32027
------------------------------------
LIFT LESSEE FUND SPANAIR 49501 32028
------------------------------------
LIFT LESSEE FUND SPANAIR 49507 32029
------------------------------------
LIFT LESSEE FUND SPANAIR 49509 32030
------------------------------------
46
LIFT LESSEE FUND SPANAIR 49519 32031
------------------------------------
LIFT LESSEE FUND VARIG 28584 32032
------------------------------------
LIFT LESSEE FUND VARIG 28671 32033
------------------------------------
Bankers Trust Company NY
ABA #: 000-000-000
Account #: 00412-996
Account Name: BTCO as Security Trustee
for LIFT-LIFT Rental Account
LIFT RENTAL ACCT (DDA Account) Reference: LIFT-[lessee][serial#]
------------------------------------
LIFT RENTAL ACCT - SUSPENSE 32034
------------------------------------
LIFT COLLECTIONS ACCT 32035
------------------------------------
LIFT BRIDGE NOTE ACCT 32036
------------------------------------
LIFT EXPENSE ACCT 32037
------------------------------------
LIFT NOTE ACCT CLASS A1 32038
------------------------------------
LIFT NOTE ACCT CLASS A2 32039
------------------------------------
LIFT NOTE ACCT CLASS A3 32040
------------------------------------
LIFT NOTE ACCT CLASS B-1 32041
------------------------------------
LIFT NOTE ACCT CLASS C-1 32042
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LIFT NOTE ACCT CLASS D-1 32043
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LIFT OWNER TRUSTEE ACCT 32044
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2
SCHEDULE 2
ISSUER GROUP SERVICES
POWER OF ATTORNEY
OF
[GRANTOR]
WHEREAS [GRANTOR], having its [registered] office at [insert
address] (hereinafter called the "Grantor") desires to appoint
PHOENIX AMERICAN FINANCIAL SERVICES, INC. having its office at
________________ (the "Attorney") as the true and lawful
attorney of the Grantor for and in the name of and on behalf
of the Grantor in such Attorney's absolute discretion to
execute each and every Requisite Document and Requisite Act as
defined below and do all or any of the acts or things
hereinafter mentioned.
KNOW ALL MEN BY THESE PRESENTS that in consideration for the
mutual promises and benefits set forth in the Administrative
Agency Agreement (defined below) the Grantor does hereby make,
constitute and irrevocably and unconditionally appoint for the
period (the "Term") as and from the date hereof until
termination or expiry of the Administrative Agency Agreement
between the Grantor, other Issuer Group Members, Bankers Trust
Company and the Attorney, dated as of June 26, 2001 (the
"Administrative Agency Agreement") in accordance with its
terms the Attorney as a true and lawful attorney of the
Grantor for and in the name of and on behalf of the Grantor
with absolute discretion to exercise, do, execute and/or
deliver all or any of the acts, documents and things
hereinafter mentioned that in to say:
1. To negotiate, approve, settle the terms of, agree, make,
sign, execute (whether under hand or seal) and deliver
all deeds, agreements, documents, commitments,
arrangements, instruments, applications, oaths,
affidavits, declarations, notices, confirmations,
certificates, approvals, acceptances, deliveries and to
do all other acts, matters and things whatsoever which
are in each case necessary or desirable for the Attorney
to do for and on behalf of the Grantor in respect of the
provision of the Issuer Group Services (as defined in
and contemplated by the Administrative Agency Agreement)
(each such document a "Requisite Document" and each such
act a "Requisite Act").
2. To make such amendments, modifications and variations to
the Requisite Documents and to enter into ancillary
documentation in respect thereof, all on such terms as
any such Attorney may, in its sole discretion, determine
from time to time for and on behalf of the Grantor; and
to make, give, sign, execute and do all things
including, without limitation, any material acts which
may be necessary in order to effect the terms of such
Requisite Documents or in connection with the making,
signature, executions and delivery of the Requisite
Documents or any other documents required to
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be executed by the Grantor in connection therewith or
the performance of any acts, matters and things
contemplated thereby or by the Requisite Acts as may be
necessary in accordance with the provision of the Issuer
Group Services.
3. To nominate and appoint one or more substitutes as
attorney or attorneys under it for all and any of the
purposes aforesaid and the appointment of same with
liberty to revoke.
4. To acknowledge this Power of Attorney as the act and
deed of the Grantor and generally to do all other acts
which may be necessary and desirable for carrying the
purpose of this Power of Attorney into effect.
IT IS HEREBY DECLARED THAT: -
(A) The Grantor hereby ratifies and confirms and
agrees to ratify and confirm whatsoever any
Attorney shall do or cause to be done in, or by
virtue of this Power of Attorney as long an such
act is not inconsistent with the terms of the
Administrative Agency Agreement or this Power of
Attorney or in violation of Applicable Law.
(B) This Power of Attorney shall be irrevocable for
the Term and at all times both before and after
the Term shall be conclusive and binding upon the
Grantor and no person or corporation having
dealings with any Attorney under this Power of
Attorney shall be under any obligation to make any
inquiries as to whether or not this Power of
Attorney has been revoked and all acts hereunder
shall be valid and binding on the Grantor unless
express notice of its revocation shall have been
received by such person or corporation.
(C) Subject to the provisions of the Administrative
Agency Agreement the Grantor unconditionally
undertakes to indemnify and keep indemnified each
Attorney and his agents, and their respective
successors and estates, against all actions,
proceedings, claims, costs, expenses and
liabilities of whatsoever nature arising from the
exercise or purported exercise in good faith of
any of the powers conferred on each Attorney by
this Power of Attorney.
(D) The particular powers enumerated above shall be
given the widest interpretation.
(E) THIS POWER OF ATTORNEY SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF NEW YORK.
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IN WITNESS WHEREOF the Grantor has caused this Power of
Attorney duly executed by the Grantor this ____ day of [ ],
2001.
SIGNED BY: ________________
For and on behalf of
[GRANTOR]
in the presence of:
